Heavy discounting helps cut shopping bill for sixth month running

Food price rises eased to 2.7pc in October on an annual basis, from 2.9pc the previous month, providing some respite for cash-strapped households.
This was driven by a fall in ambient items including non-alcoholic drinks and chocolate, while alcohol prices also eased.Photo: JOANNA PATERSON

British shop prices fell for a sixth consecutive month in October, amid falling food price inflation and heavy discounting by clothing and book retailers.

"Super Thursday", where publishers choose a day in October to release almost 1,600 would-be Christmas bestsellers at discounted rates, pushed the books and stationery category into deflation for the first time in more than a year. Annual price falls in the clothing and footwear category, meanwhile, moved into double digit territory, according to the British Retail Consortium (BRC) and global information company Nielsen.

"Promotional activity was stepped-up to entice consumers to spend as the warmer weather in October meant that autumn/winter collections were slow to take off," they said in a report.

The 10.7pc annual fall in clothing and footwear prices meant non-food deflation climbed to its second highest annual rate, at 2.4pc in October, while overall shop price deflation deepened to 0.5pc, from 0.2pc in September.

Food price rises eased to 2.7pc in October on an annual basis, from 2.9pc the previous month, providing some respite for cash-strapped households.

This was driven by a fall in ambient items including non-alcoholic drinks and chocolate, while alcohol prices also eased.

However, fresh food inflation remained stubbornly high at 2.9pc in October, as prices of meat, vegetables and ready meals continued to rise. The fresh food inflation rate is slightly above September's official consumer price index (CPI) measure of inflation, at 2.7pc.

"Despite the slightly more optimistic outlook, across the industry we are seeing that consumers are still reluctant , unwilling or, in some cases, unable to increase spend," said Mike Watkins, head of retailer and busness insight at Nielsen.

However, the BRC said that competition was likely to intensify over the coming months, as retailers fight to grow or protect market share during the busy Christmas period.

"Based on current trends we also anticipate an increase in promotional spend by food retailers, which will offer cash-strapped consumers further savings ahead of December," said Mr Watkins.

Helen Dickinson, director general of the BRC, also believed that consumers would benefit from further falls in food price inflation in the coming months. "This should mean good deals for shoppers as they start stocking up on seasonal fare," she said. "With Christmas fast approaching, there are good signs that budgets will go a little bit further for many of us this year."

Britons currently spend 35pc of their weekly supermarket shop on deals, compared to 27pc before the financial crisis.